A female can become karta of HUF

Updated: Apr 9 2006, 05:30am hrs
Can a female also be a karta of HUF. My father was the karta of our HUF. Now he is no more. Can my mother become the karta
Anagha Deshpande

Yes, a female can become a karta, but only when the male members are minors or are not in a position to manage the affairs and give a declaration to that effect and seek the permission of the Department to allow the female to manage. Champa Kumari Singhi v Revenue (1962) 46ITR81 (Cal).

Moreover, when an existing HUF is reduced to only female members, it can still continue as an HUF with one of the females as a karta. This is in view of the existence of the potential coparcenary as any widow may, in future, induct a coparcener into the family by adoption. CIT v RM AR AR Veerappa Chettiar (70) 76ITR467 (SC).

(1) Under PPF rules, no account can be opened in the name of HUF. However, u/s 80C of the IT Act 1961, an HUF can have a PPF account in the name of any member. Suppose Mr A, the karta, invests Rs 50,000 each out of HUF funds in the PPF accounts of two members of the family Mr X and Mr Y (both being major sons of Mr A), can the HUF claim deduction of Rs 1,00,000 u/s 80C in its own case

If for the purpose of PPF regulations the accounts of Mr X and Mr Y are treated as their individual accounts, can they each further invest Rs 20,000 each and claim deduction u/s. 80C in their individual cases

Whether the aforesaid investments would be in violation of PPF rules which w.e.f. 13.05.05 bar HUF to have any account in its name

(2) Mr A is assessed to tax in his individual capacity. He has deposited Rs 70,000 in his PPF account. He also desires to deposit Rs 30,000 in the PPF account of his major son Mr B and wants to claim deduction of Rs 1,00,000 u/s 80C of the Act in his own (Mr A) case. Of course, in the aforesaid situation Mrs A or Mr B would not claim deduction u/s 80C in her/his case in respect of the said deposit of Rs 30,000. Can Mr A do so and claim deduction u/s 80C up to Rs 1,00,000

The answers to all your queries are in the affirmative. The ITA is independent of NSO Rules. In other words, Sec 80C grants a deduction of Rs 1,00,000 for investments in various schemes including PPF. However, PPF rules limit the investment to Rs 70,000. However, you are free to combine Sec 80C and the PPF rules for maximum benefit. Therefore, as PPF rules allow the investor to contribute separately in the name of the spouse or the children and also allows the karta to contribute in the name of the any member, all combined a total deduction of Rs 1,00,000 may be claimed.

I am a salaried employee. I have purchased a flat in Mumbai and will get the possession of the flat in April 2007. For that, I had taken a loan of Rs 15 lakh from a bank to be repaid in 20 years on variable rate of interest. I had taken a room for rent of 7,000 per month. For tax deduction claim, I had showed an HRA of Rs 7,000 per month for the whole year. I am paying an EMI of Rs 12,315 for the home loan. The total principal component is 70,000 and interest component is Rs 33,000. I had also made Rs 5 lakh as part-prepayment.

I want to know whether I can claim tax deduction on principal component of loan as EMI and part-prepayment paid in current financial
BP Tripathi

The deduction u/s 80C and the interest u/s 24 are allowed only when the income from house property becomes chargeable to tax. In other words, the construction should be complete, the flat should be ready for occupation and the municipal annual value is known. The interest for the years prior to the year in which the property was completed, shall be deducted in equal installments for the year during which it was completed and each of the four immediately succeeding years. Unfortunately, there is no corresponding provision for the capital repayment.

The authors may be contacted at wonderlandconsultants@yahoo.com